Should You Buy OMNOVA Solutions Inc (NYSE:OMN)?
OMNOVA Solutions Inc (NYSE:OMN), a chemicals company based in United States, saw significant share price volatility over the past couple of months on the NYSE, rising to the highs of $11.7 and falling to the lows of $9.65. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether OMNOVA Solutions’s current trading price of $9.9 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at OMNOVA Solutions’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for OMNOVA Solutions
Is OMNOVA Solutions still cheap?
Great news for investors – OMNOVA Solutions is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $12.73, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, OMNOVA Solutions’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will OMNOVA Solutions generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with a relatively muted revenue growth of 8.61% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for OMNOVA Solutions, at least in the short term.
What this means for you:
Are you a shareholder? Even though growth is relatively muted, since OMN is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on OMN for a while, now might be the time to make a leap. Its future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy OMN. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on OMNOVA Solutions. You can find everything you need to know about OMNOVA Solutions in the latest infographic research report. If you are no longer interested in OMNOVA Solutions, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
